Both retirees and workers are more concerned about financing their retirement, though only 33% of workers and 57% of retired people surveyed by the Society of Actuaries have a financial plan for retirement.
The biennial survey of 800 workers and 800 retirees found both groups worrying more about their savings and investments keeping up with inflation. In 2011, 69% of retirees and 77% of workers worried about inflation; in 2009, those figures were 58% and 71%, respectively.
“People are more responsible for managing on their own,” said Anna Rappaport, chairwoman of SOA's Committee on Post-Retirement Needs and Risks, in a telephone interview. “But we know there are problems with financial literacy.”
While many defined contribution plans have added default options like auto enrollment and auto escalation, “one missing element in most plans is a vehicle or simple process to convert lump-sum account balances into a stream of lifetime income,” the authors note in their survey report.
Another area of concern is how long people will live and what steps they could take to manage longer retirement, such as longevity insurance. “It's hard for people to understand the variability of that. That's where we need to do more work,” said Cindy Levering, who chairs SOA's pension research team. More than half, 54%, of retirees underestimated average life expectancy, while 44% of workers did so, the survey found.